The film was in production during the latter months of 1987. It was released on July 6, 1988 in the United States and grossed over $20 million at the domestic box office. It was distributed by 20th Century Fox.

The film is about Les Anderson (Haim), a 16-year-old who is trying to get his driver's license. He has a crush on one of the more popular and attractive girls in school, Mercedes Lane (Graham).

After failing his driver's exam, Les takes the road test (and passes), following a computer surge that he unknowingly caused. The Department of Motor Vehicles had originally let him pass the exam (as his failing score was irretrievable after the computer surge) because his twin sister had scored so highly. They decided that twins couldn't be too different, but when his test scores are finally retrieved, his new license is torn up and he is officially failed. Les lies to his parents and friends, convincing them that he has passed the test. Unfortunately his parents find out the truth and as a result, Les is grounded. That night, having already made plans to use his new license, he sneaks out of the house with his grandfather's prized 1972 Cadillac for a night on the town with Mercedes. After showing him how the city looks from far away on a hill, she tells him that her father used to bring her there. While Mercedes is getting drunk, she and Les cause minor damage to the hood of the car by dancing on it. Mercedes then passes out.

Les panics and goes to his friend Dean's house, where Dean (Feldman) fixes the dents in the car's hood. Dean persuades Les to go out for a joyride, along with their friend Charles, who are both still unaware that Les does not have a license. The three, along with a blacked out Mercedes (who they eventually put in the trunk of the car), end up getting into all kinds of trouble and hilarity ensues as they cause more damage to the Cadillac.

Of course, the next day, Les does get in trouble with his father after coming back home (after dropping Charles, Dean and Mercedes off at their homes) with a Cadillac that is damaged beyond minor repair. Then his mother shouts that she's in labor. Luckily, Les is able to drive his father, little brother Rudy and his mom to the hospital - in reverse, because the Cadillac is so badly damaged it can no longer be put into drive. After they get there and Les's mother is taken into the hospital, a crane falls and crushes the Cadillac. Both Les and his dad are shocked. Later, thankfully, Les' grandfather laughs it off when he jokingly reveals that he had written off Les' father's BMW.

Les' father tells Les that the BMW is all his now, and, laughing, tells him to take good care of it. But Les says that he does not need a BMW anymore and, when Mercedes pulls up in a Volkswagen Golf Cabriolet, hops into it. Les then drives off with Mercedes, and the credits roll.

Chicago Sun-Times critic Roger Ebert summarized this by stating that "..."License to Drive" remembers feelings like that[clarification needed], and it brings back the whole complex of emotions about being 16 and taking your test.. ".

A special edition DVD was distributed by Anchor Bay Entertainment in the United States on May 3, 2005.

Special features included:

The DVD has been out of print for years and is very rare to find an inexpensive copy; most go for over $50 on sites like Amazon. A Blu-Ray of the film is rumored for an August 2010 release, though this has not been confirmed or denied.